Case descriptions

asking reviewers who were familiar to the study or the phenomenon to review the data and the research process (Cresswell and Miller 2000).

5.4 Case descriptions

Following sections will present descriptions of each case company describing their current approach risk management as well as network utilization. All companies are located in South-Karelia region, Finland.

Company A operates in the industry of wellbeing services and dietary supplement retailing. The company has one employee, the entrepreneur. The company was established in 2012 and provides tailored wellbeing services and products to its customers. The entrepreneur is in charge of risk management and identifies as well as analyzes potential risks constantly. Moreover, the company has extensive network, existing of sev-eral different informal and formal network members.

Company B operates in the entertainment and activity services industry. The informant is the CEO of the company and it employs altogether two employees. The company was established in 2017 and offers dif-ferent entertainment and activity services for B2C and B2B customers. CEO of the company is in charge of risk management. The company does not have an extensive network limiting the amount of informal and formal actors.

Company C operates in restaurant and catering services industry offering services to B2C and B2B custom-ers. The company employs five people and was founded in 1980’s. Risk management is conducted by the entrepreneur and cautiousness is an essential part of their business operations. The company’s existing network comprises mostly of formal actors.

Company D operates in machining and metal product design and development offering its services to B2B customers. The company has seven employees and was founded in 1975. The Company offers versatile services such as machining and design and aiming to offer added value to its customers by increasing the life cycle of its products. Risk management is conducted by the owner as there is no possibility to recruit another person to handle risk management. Moreover, the network of the company is challenging especially with certain stakeholders.

Company E operates in the industry of bakery and cafeteria services. The company was originally founded in 1960’s and it employs nine people. The company’s aim is to provide, fresh products without food addi-tives to its B2C customers. The entrepreneur is in charge of risk management. The network of the company comprises both formal and informal actors.

Company F offers its B2B and B2C bakery and cafeteria services. The company was founded over 25 years ago and offers local and handmade products to its customers. Furthermore, the company employs 10 people.

55 The entrepreneur is in charge of risk management and the network of the company includes the personal network of the entrepreneur as well as other stakeholders related to business activities of the company.

Company G is in the industry of sports equipment and small machine retailing. The company is a family business established in 1970 employing 40 people. The company offers a versatile selection of products and customer service professionals for its B2C and B2B customers. Several employees take part in the risk management process and several risks are anticipated. Moreover, risks are not focused on single person in the company but the responsibility is shared among the staff responsible of different departments. The network of the company is large consisting of long-term suppliers, which is mainly due to the long history of the company.

Company H operates in the transport and logistics services industry as well as wood chipping processing.

It is a family business and was originally founded nearly 50 years ago. The company employs 47 people and has long traditions and is an innovative, trustworthy and punctual partner for its B2B customers. Be-sides the CEO, also other managerial level employees take part in risk management. Due to the investment-intensive nature of business, risks are carefully analyzed before investments are made. The company has good and long relations with its important customer and is regarded as a trustworthy operator.

Company I is in sports entertainment business and employs 50 people. It was founded in 2000 and offers sports entertainment for both B2C and B2B customers. Risk management is conduced by the CEO as well as other managerial level employees. The company has a wide network consisting of several different op-erator and business partners.

Company J operates in the industry of vehicle sales and maintenance employing 65 people. The company has been in operation for over 50 years providing its B2C and B2B customers versatile services related to vehicles and their maintenance. The key personnel found within the company conduct risk management.

The network of the company consists of formal stakeholders and the personal network of the informant.

56 6. ANALYSES AND RESULTS

In this chapter the empirical findings are presented and explained in detail. First, the megatrend-related changes in organizational context are explored: how these changes are recognized and perceived. An over-view of the results is presented to indicate differences and similarities across cases. Second, the risk man-agement processes to the risks arising of megatrend-related changes of the companies are explained and studied what risk management activities companies utilize and how different stakeholders contribute to the process. Furthermore, three mini cases are presented in each phase and through within case analyses, cases are explored as stand-alone entities utilizing the theoretical framework presented in Chapter 4.

6.1 Megatrend implications

In order to analyze companies’ risk management practices to megatrend-related impacts, the impacts of megatrends need to be examined in organizational context and how these changes are recognized and per-ceived. Recognized local impacts and risks are listed in Table 4, which offers insights on how these im-pacts are recognized and perceived by informants.

Table 4. Recognized megatrend-related risks

Recognized local impacts include mainly threats, which can present potential operational and strategic risks.

Moreover, it offers insights to differences and similarities across cases. In fact, some preconditions sug-gested by Kelliher and Reinl (2009) which affect in risk management, seem to affect on recognizing local impacts: firm size and operating sector. In fact, Table 4 is quite revealing in several ways. It seems that recruitment challenges are more evident in larger companies. Moreover, digital platforms are more widely used in larger firms and therefore, their implications are more easily recognized and perceived. Besides

57 firm size, in some cases sector also effects on identified megatrend-related changes and it seems that changes related to automation and robotics are more evident in industries were majority of work tasks can be automated in industries such as baking industry.

From economical megatrends, one informant recognized that sharing economy has decreased sales. An increasing amount of customers are not willing to own a product and instead use second-hand products decreasing the amount of customers buying new products from the store.

A variety of perspectives were expressed when discussed of urbanization impacts. One informant felt that urbanization has contributed to recruitment challenges, in particular in rural areas outside large cities the company had challenges to recruit employees. Another informant considered that urbanization has slightly decreased the amount of potential customers as metropolitan areas are able to provide public transportation and thus the products offered by the company are not needed. Furthermore, one informant considered that due to urbanization, it was more challenging to attract customers outside metropolitan areas to rural areas.

One information also noted that due to urbanization, an increasing amount of clients are living in urban areas which effects on the customer service they require. In contrast, some noted that as the business is located in a city, urbanization increases the amount of potential customers

A common view amongst the informants recognizing impacts of aging population was that it contributes to loss of knowhow and skilled employees. One informant argued that aging populations has created re-cruitment challenges and when employees retire, there are fewer instructors to pass on knowledge to newly recruited employees. Furthermore, retirement took place in waves, which caused pressure to replace a large number of employees at one time. Besides loss of knowhow, aging population was perceived by two in-formants to slightly decrease the amount of customers as currently, majority of the company’s clientele consisted of older generations.

Some interviewees recognized that globalization has increased competition. Increased competition was caused by global chains entering the Finnish market or increased usage of online stores contributing to increased the amount of competitors worldwide. Global chains entering the Finnish market were perceived as a risk due to their economies of scale and scope. Furthermore, some interviewees argued that globaliza-tion has decreased the risk of online purchases increasing the usage of online stores, in particular among products, which do not require the expertise of a salesperson. Consequently, increasing the usage of online stores.

While several informants felt that globalization had increased competition, one informant considered that globalization has increased delivery times for products. This informant mentioned how globalization has caused centralization of operations resulting into large warehouses, which has increased the distances and

58 increases the delivery times for the products. Surprisingly, another informant felt the opposite and consid-ered that globalization has shortened delivery times and made them more trustworthy. In contrast, many informants considered that globalization has lowered process and increased business opportunities.

Amongst technological megatrends, implications of automation and robotics were related to increased com-petition. Some informants considered that automation and robotics enable more efficient production con-tributing to lowered prices. Which in turn, created increased competition to companies, which were not utilizing such technologies. Moreover, automation and robotics had enabled production of wider selection different products, which offers more alternatives to customers. Consequently, this had affected customer preferences to change increasingly often, creating pressure to informants to offer a variety of different prod-ucts as well. Besides negative impacts, respondents also noted that systems, which enable automation of certain work tasks, reduced manual work. However, although these systems were seen beneficial, there were expenses on purchasing these systems. Automation also enabled a paperless office, which brought ease to the entrepreneur and freed time for other work tasks.

A recurrent theme in the interviews amongst companies utilizing digital platforms was that they are time consuming and increasing workload. Usage was time consuming due to difficulties in usage, using several different platforms, which did not work together and managers needing to supervise reporting. Furthermore, informants mentioned that software cost as well as equipment to use them. One informant also noted that the usage of digital platforms has had an impact to purchasing: product selection has decreased and products cannot be seen before purchase. Digital platforms also enable selling of used products online, which had caused decreasing sales for one informant. In particular, digital platforms enable exchange of used products more easily and reaches a large audience. In contrast, some informants were able to recognize also positive features of digital software such as automatic data generation, increased transparency, worktime monitoring and tracking system.

Besides automation, robotics and digital platforms, a common view among the informants was that there are no implications of technological megatrends. Thus, this may indicate that these megatrends are not currently relevant for the case companies.

From environmental megatrends, some respondents felt that climate change did not have an impact on their business while others recognized implications of changing weather and especially precipitation’s impacts to business. However, implications were cautiously linked to climate change with uncertainty whether they are caused by it. These recognized impacts included volatility in workload due to poor weather conditions and changes in customer behavior such as not pre buying of certain products for specific season due to uncertainty of this season.

59 Together these findings indicate that majority of companies recognized at least one local implication for megatrends. Moreover, it seems that majority of companies recognized one megatrend which had most significant impacts to business.

6.1.1 Megatrend recognition and perception

One unanticipated finding was that differences in perception and recognition of megatrends begin on the definition of the megatrend itself. In some cases, the informant was not familiar with the megatrend or considered the megatrend to have a different definition.

Two broad themes emerged from the analysis how informants recognized and perceived megatrend-related changes: internal resources and external resources. A recurrent theme amongst informants was that own thinking and reasoning were broadly utilized to recognize changes. In recognition several informants men-tioned using observation to examine events in own company, other companies and communities to recog-nize potential risks to company. In fact, all informants mentioned several ways to perceive megatrend-related changes with internal resources, while some mentioned also the utilization of external resources in the process. These external resources consisted of networks formed of employees, managers, customers, suppliers, retailers, importers, business partners, other entrepreneurs, competitors, consultants, trade union, public conversation, academia, political parties and social media. These sources also provided information and signals of possible changes, which was constructed by the informant with own thinking and reasoning to recognize possible risks arising from change.

Whilst a majority of informants conducted observing, thinking and reasoning unsystematically on their own, one informant mentioned of a workgroup which was formed to share observations with other mana-gerial level workers and to evaluate their impacts.

Once a change was recognized, own resources and network resources were utilized to perceived the change.

Majority of informants perceived the recognized changes through own experiences, which aided to define the nature of the change. Thus, in case the experiences were negative, the change was perceived as negative and as a possible risk for the company. Furthermore, some informants mentioned receiving information and signals from networks, which contributed to perceiving changes. Employees and business partners provided information and observations. One informant mentioned benchmarking with other entrepreneurs, competi-tors, of changes and their impacts. In some cases also suppliers informed of their observations which was seen useful for perceiving the changes. From public conversation some informants mentioned receiving knowledge on is a change having positive or negative impacts, which had an impact on the perception.

60 Customers also provided information on perception as well as case examples of similar situations. Further-more, one informant mentioned that also inner circle, social media and political parties provide information for perceiving changes.

One unanticipated finding was that, informants perceive both direct and indirect changes to their business.

Majority of informants considered primarily implications to their business regarding the direct implication of megatrends. However, some informants also considered what local implications megatrends can have to their stakeholders such as suppliers and considered how those changes can indirectly affect to their business.

In fact, one informant also considered the national impacts of online stores and how they impact in the economy which indicates that perception can also take place in such called levels starting from own busi-ness and proceeding to supplier and even national level impacts.

6.1.2 Mini cases

Next, three mini cases are presented to describe how certain megatrends affect in the organizational context of individual case companies and how the changes are recognized and perceived. The most significant recognized local impacts are presented first, moving to less significant impacts. Detailed figures on the complete process of recognizing megatrends and taking risk management activities are presented in Chapter 7.2.

Case company A

The first case will present how a megatrend-related changes affect in the organizational context of case company A, a micro enterprise with one employee operating in the industry of wellbeing services and die-tary supplement retailing. Informant recognized how globalization has increased competition to such an extent that smaller operator might not be able to cope with it and customers want to buy from larger chains as they are able to provide services from a wider scale. This change was perceived both positive and nega-tive: although globalization offers an access to global chains to enter Finnish market creating intense com-petition, it also offers an access for SMEs to access international markets.

Globalization megatrend was made sense through a process of receiving information and experiences from different perspectives such as business partners, colleagues, inner circle, social media groups, recreational groups, customers, studies, trainings, local government and different positions of responsibility, which was constructed and processed by the informant. Furthermore, informant constantly observed the society and other companies to examine what is happening and what is the reason why other companies succeed and others not. These observations are taken into consideration when business decisions are made. In summary, information, experiences and observations take part in internal dialogue, which the informant combines and constructs and uses for the decision-making process of perceiving changes.

61 Case company F

The second mini case describes how megatrends affect in the organizational context of case company F, a small enterprise in the baking and cafeteria services industry with 9 employees. Automation and robotics related changes had caused turbulent changes in the firm’s organizational context as larger companies, which were able to invest in automation and robotics, were able to produce bakery products more faster and cost-efficiently utilizing economies of scale and scope. Which, in turn, created intense competition for the case company producing its products manually. These megatrend-related changes were recognized through own experiences and observations and these changes were perceived as a risk to the firm.

Besides technological changes, also social changes affected in the organizational context: once employees retire, a remarkable amount of knowhow is lost as well. In particular, as this company’s products are made manually which highlights the importance of manual skills and knowhow. Moreover, young employees replacing these retiring employees do not have the same skills and knowhow. These impacts were recog-nized through own reasoning and perceived as negative.

Case company H

Third mini case examines what impacts megatrends have to case company F, a small enterprise with 47 employees operating in the transport and logistics services and wood chipping processing industries. Ur-banization created recruitment challenges as it was more challenging to recruit staff when the workplace was not located in a large city. Moreover, urbanization has initiated a change in the clientele as an increasing share of the company’s customers, forest owners, live in urban area which has changed the way of work and how these customers need to be treated. These megatrend-related changes were recognized through own reasoning and recruitment experiences and perceived negative.

Aging population has created recruitment challenges as while employees retire, it is challenging to recruit new employees and there is a scarcity of employees to brief and train new employees. Furthermore, em-ployees retire in waves creating pressure to recruit many new emem-ployees in one time. In addition, these changes were recognized through own experiences and reasoning and they were perceived negative.

Aging population has created recruitment challenges as while employees retire, it is challenging to recruit new employees and there is a scarcity of employees to brief and train new employees. Furthermore, em-ployees retire in waves creating pressure to recruit many new emem-ployees in one time. In addition, these changes were recognized through own experiences and reasoning and they were perceived negative.